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Auto loans pass $1 trillion in the U.S.

For the first time in history, American auto debt has surpassed $1 trillion.

In early August, a new report from the Federal Reserve Bank of New York revealed that around $119 billion in auto loans were originated between May and July of this year. That number was not only a 10-year high for any single quarter, but put the total value of auto loans in the U.S. over the $1 trillion mark.

The results for the second quarter are hardly a surprise, as consumer vehicle purchases in May were at an annual pace of 17.6 million, the highest rate since June of 2005, according to The Wall Street Journal (WSJ).

Auto loans were relatively flat at around $800 billion for a few years prior to the crash in 2008. The recession caused the value to dip to around $700 billion, but it recovered in 2010 and hasn't looked back since.

"There was some tightening in auto-loan standards after the financial crisis, but by many measures it's returned basically to where it was pre-recession," Wilbert van der Klauw, a New York Fed economist, told WSJ.

Auto loans are now the second major debt category to be over $1 trillion, as student loans passed that mark for the first time in 2013 and has continued to increase since. Despite the debt amounts in those two categories, American borrowers still owe less overall since before the recession due to declines in home loan and credit card balances that have yet to fully recover. David Berson, chief economist at Nationwide Insurance, attributes this to job growth and low gas prices.

"A lot of the gain we've seen is from light trucks, SUVs, cross-overs, minivans and pickup trucks," Berson told WSJ. "Because gasoline prices have come down, it makes it less expensive to run the vehicles that use more fuel."

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